PILOTS

INTRODUCING FISCAL ZONING - SOFIA

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TURAS expert contact:
Aleksandar Slaev
leader of Work Package 5

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APPROACHING THE INTRODUCTION OF AN INNOVATIVE PLANNING INSTRUMENTS TO BALANCE THE COSTS OF SPRAWL

THE PROJECT

THE GOAL

The project aims to enhance the effectiveness and efficiency of urban planning by developing a system of fiscal tools (local charges and taxes) for peri-urban areas which can regulate rates and patterns of urban growth/expansion. The key principle of this system is that those who use/consume natural amenities and public goods and services, such as suburban infrastructure, should pay for what they use/consume. Thus, this principle is both fair (as the burden is on the actual consumers) and sustainable (as it provides an economical use of land and natural resources and amenities).

LOCAL TASK FORCE

The Varna Free University team (VFU) led the project together with the Spatial Planning Directorate of Sofia Metropolitan Municipality, more specifically with the director of the Directorate and the leading experts of Sofproekt. A wide range of participants were invited to join in the discussion meetings such as the chief architect of the Metropolitan Municipality, the head of the Budget Department of the Finance Directorate, heads of departments of the Administrations of Novi Iskar and Kremikovtsi districts, the mayor and deputy mayor of the district of Novi Iskar and, representatives of the body/chamber of industry and commerce. On the other hand, any authority from the Kremikovtsi district was present and, even though local NGOs, environmentalists, representatives of interested groups and local business did take part in the discussions, their participation was insufficient.

THE PROCESS

The pilot project is developed in two phases:
The first phase includes a research for the development of fiscal zoning tools which consists of: 1) an analysis and evaluation of the costs of infrastructure development and; 2) an assessment of the values of natural amenities/ecosystem services.
The second phase includes the preparation of a policy proposal for the Municipal Council and comprises of three discussion meetings with the stakeholders.

Existing dynamics

The project presents strong connections to the political level through its relationship with the Spatial Planning Directorate of Sofia Metropolitan Municipality, the Budget Department of the Finance Directorate, the District Administrations of Novi Iskar and Kremikovtsi and two NGOs from the district of Novi Iskar.
In addition, the three meeting discussions were positive to induce some changes in the agenda of the represented bodies/organizations in regard to their assessment of the environmental trends, the influence of fiscal tools on these trends and the fair rules of urban development.

Obstacles

One obstacle that the project had to deal with is the lack of awareness of citizens, businesses, and other interested groups about the shared ownership of public goods and natural amenities. Therefore, it was difficult for them to understand the specific role of charges and taxes as instruments for managing urban development (and hence, as tools that should protect the environment and provide a social and economic fairness). In order to overcome this situation, it was necessary to discuss with all participants the proposed measures and clearly explain how local charges and taxes can help to improve urban development.

Resources

Along the different phases of the project, numerous resources were needed. For instance, while for the first phase mainly researchers were required, for the second phase it was crucial to count with highly motivated proposers that should be aware of the use of fiscal zoning to improve local development and the economical use of natural resources. Thus, it was necessary to count with the expertise and motivation of the experts of VFU and the Spatial Planning Directorate. In addition, time availability was another key resource.

Strokes of luck

The project had a great support from several groups: on the one hand, from the experts of the Spatial Planning Directorate, who perceive that it is time for a new general amendment of the Master Plan, as substantial changes in the urban trends have occurred since the last Amendment in 2009 (for example, the real estate market crisis). On the other hand, from local interested groups (such as environmentalists, landowners, residents), who have stated that changes in the master plan are needed.

THE ACHIEVEMENTS

Short-term results

Thus far, the project has resulted in three discussion meetings (two of them held at the Sofia Metropolitan Municipality and the other one held at the Novi Iskar district administration), and a draft of the proposal for the changes to be applied in four ordinances of Sofia Metropolitan Municipality. However, this is still considered a draft as at least two more discussions are necessary and members of the Municipal Council should be consulted as well.
Measurable results are not yet available and would require drawing a comparison between the before and after situations in Sofia’s suburban areas. However, such a comparison is, on one hand, exceptionally difficult to be carried out and, on the other hand, highly problematic in terms of reliability.

Long-term benefits

By implementing a better system of local charges and taxes, the project is expected to enhance almost all aspects of suburban development, and particularly in: achieving a more fair and efficient allocation of the fiscal burden among urban development stakeholders; improving protection of suburban environment; promoting a more efficient development of suburban areas (through higher rates of economic and social development at lower environmental cost).

Key lesson learned - Aleksandar explains

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"One of the key lessons for us is that the economic rights of all stakeholders involved in urban development are at the core of the management of urban development and urban planning. And that even though someone inevitably will pay for all the natural resources consumed, the protection of the economic rights of future generations should be the essence of urban sustainability. In addition, convincing stakeholders about changing the system of local charges and fees is not only a relevant solution but is the most appropriate, effective and efficient. However, coming to an agreement about what changes are needed in the system of local charges and taxes, it is a challenging task."
Aleksandar Slaev, VFU